WISCONSIN ARTS BOARD

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Wisconsin Arts Board guidelines require that all organizations applying for a grant be exempt from Federal income tax under the provisions of the Internal Revenue Service Section 501(c)(3) at the time of application.

For some groups this exemption is either not possible or not yet obtained. Often pilot projects, ad hoc committees, or new groups do not yet have the longevity or the expertise to apply for this tax exemption. Such groups often apply for a Wisconsin Arts Board grant through a “fiscal receiver.”

A fiscal receiver is any nonprofit arts organization or community organization that already holds a 501(c)(3) exemption. As a fiscal receiver, an organization agrees to accept Wisconsin Arts Board funds on your behalf and disburse those funds to you through their accounts. For example, a local community college, university, municipal government office, or an established nonprofit arts organization in your area can act as a fiscal receiver.

If you have requested an organization to act as a fiscal receiver for you, you should be aware of several items to protect yourself as well as the fiscal receiver. The following information should be used as a guide to help you determine exactly what are the responsibilities of the fiscal receiver, what you should ask of the organization, and what you should be prepared to provide to them.

As a fiscal receiver an organization will:

• Be ultimately responsible for all contract provisions, as the contract for the specified project will be drawn with that organization;
• If funded, receive a check made payable to the fiscal receiver, and;
• Not damage their own chances of applying separately and/or receiving funds from the Arts Board—a fiscal receiver is not considered to be the primary applicant.

We recommend that you know your fiscal receiver well, and that they know you, including your history of administrative competency. We also recommend that you draw up a contract with the fiscal receiver stipulating certain provisions. These provisions should include, but not necessarily be limited to points such as:

That you (the applicant) will conform to all contract provisions, including all necessary reports with copies to your fiscal receiver on request; that you report to your fiscal receiver at least quarterly on the progress of your program; that you keep and supply your fiscal receiver with copies of all receipts for grant fund and match expenditures; and that you maintain a reporting contact with one member of your fiscal receiver’s staff or Board.

Some fiscal receivers require additional stipulations, for example, a co-signature on all fund expenditure checks, some will retain the grant funds and make payments directly to creditors from their account. Some fiscal receivers may want to charge a fee for their services. These stipulations are entirely up to you and your fiscal receiver.

Ultimately, if the applicant deliberately mishandles the funds the fiscal receiver becomes responsible for the program funding. This is why it is essential that the fiscal receiver know the organization for which it is acting as fiscal receiver and that they trust that organization.

To obtain 501(c)(3) tax exempt status for your own organization
It is strongly recommended that you consult a legal advisor during this process.

1. You must already have a Federal Identification Number. (This basically acts as a Social Security Number for your organization.) To obtain a Federal Identification Number you must fill out federal form #SS4.*
2. File form #1023.* This is the application form for 501(c)(3) tax exempt status.
3. File a user fee. The IRS requires a fee to process your application. This fee is submitted on form #8718.* For organizations with a four-year average annual budget of under $10,000 the user fee is $300, otherwise it is $750.

Once completed, the user fee and form #8718 along with the application form #1023 should be submitted to:

Internal Revenue Service
PO Box 192
Covington, KY 41012-0192

It may take the IRS up to six months to issue a determination letter.

* To obtain any of these forms contact the IRS at 1-800-829-3676 (1-800-TAX-FORM), or download the forms directly from the IRS website.

 

Updated: February 20, 2009